Interestinghttps://www.wsj.com/articles/rising-bond-yields-falling-industrial-demand-behind-slumping-silver-prices-11633474605
Prices just wrapped up their worst four-month stretch since November 2014, dragged down by expectations for higher interest rates and a slowdown in manufacturing activity. Front-month silver futures have fallen more than 21% in that period to around $22 a troy ounce.
“Right now, all precious metals are reacting to less-than-anticipated industrial demand and the combination of a shift in the Fed policy of tapering and a stronger dollar; all of those things have made a cocktail for negative metals,” said James Steel, chief precious-metals analyst at HSBC.
One factor buoying silver earlier in the year: expectations that increased infrastructure spending would help spur a rapid increase in the use of renewable-energy sources, said Suki Cooper, a precious-metals analyst at Standard Chartered. Silver is used in solar panels.
Silver prices will recover ground if industrial trends improve and the chip shortage eases, making the metal’s outlook healthier in the long term, said Ms. Cooper.
“There was a lot of early buying in silver in anticipation of that demand materializing, so given that these developments are going to take years to unfold, there’s naturally going to be a dip in terms of investor interest because they came into the market early,” Ms. Cooper said.